Correlation Between China State and Tianshan Aluminum
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By analyzing existing cross correlation between China State Construction and Tianshan Aluminum Group, you can compare the effects of market volatilities on China State and Tianshan Aluminum and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China State with a short position of Tianshan Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Tianshan Aluminum.
Diversification Opportunities for China State and Tianshan Aluminum
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Tianshan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Tianshan Aluminum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshan Aluminum and China State is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China State Construction are associated (or correlated) with Tianshan Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshan Aluminum has no effect on the direction of China State i.e., China State and Tianshan Aluminum go up and down completely randomly.
Pair Corralation between China State and Tianshan Aluminum
Assuming the 90 days trading horizon China State Construction is expected to generate 0.71 times more return on investment than Tianshan Aluminum. However, China State Construction is 1.4 times less risky than Tianshan Aluminum. It trades about 0.11 of its potential returns per unit of risk. Tianshan Aluminum Group is currently generating about 0.01 per unit of risk. If you would invest 589.00 in China State Construction on September 26, 2024 and sell it today you would earn a total of 13.00 from holding China State Construction or generate 2.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
China State Construction vs. Tianshan Aluminum Group
Performance |
Timeline |
China State Construction |
Tianshan Aluminum |
China State and Tianshan Aluminum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China State and Tianshan Aluminum
The main advantage of trading using opposite China State and Tianshan Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Tianshan Aluminum can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tianshan Aluminum will offset losses from the drop in Tianshan Aluminum's long position.China State vs. Ming Yang Smart | China State vs. 159681 | China State vs. 159005 | China State vs. Loctek Ergonomic Technology |
Tianshan Aluminum vs. China State Construction | Tianshan Aluminum vs. Poly Real Estate | Tianshan Aluminum vs. China Vanke Co | Tianshan Aluminum vs. China Merchants Shekou |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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